Untangling the Enterprise: Consolidation, Intercompany Reporting, and Eliminations in Power BI and Acterys

Summary

In this edition, we will be covering the following items:

1. The value proposition for consolidation and eliminations in Power BI

2. Understanding the mechanics of building consolidation and eliminations in your Power BI reporting

Simplifying Intercompany Transactions for Reporting and Analytics

Companies with multiple entities can face challenges when trying to create dynamic financial reporting and analytics because of intercompany transactions. Power BI can be used to create dynamic financial reporting that allows you to view the consolidated organization or filter down to distinct entities. This can (and should) be enhanced with intercompany eliminations where appropriate.

1. Transactions Affecting the P&L: Consider the example of Entity A providing services to Entity B. Entity A’s Sales should be equivalent to the reciprocal Cost of Sales for these transactions. By entering eliminating values, we can avoid double-counting Sales and COS in our consolidated P&L. Acterys’ write-back and data modeling functionality is the critical component to enter these values for Power BI reporting.

2. Balances Affecting the Balance Sheet: Extending our example, if we assume that Entity B pays Entity A on net 30 terms, then the two entities will have mirroring accounts receivable and payable for these transactions. Being able to identify and enter offsetting eliminations to these accounts quickly via a centralized dashboard is critical to generating accurate balance sheet analytics.

The Mechanics of Intercompany Consolidation with Power BI and Acterys

Recall that Acterys is designed for data integration and write-back within Power BI. Use cases like intercompany consolidation and eliminations for analytics and reporting showcase exactly why the flexibility of the tool is perfect for FP&A teams.

1. Identify GL Accounts and Counterparties: Your team will need to work with business partners to identify the appropriate GL accounts onto which they will enter eliminations. Understanding the reciprocal accounts and entities will help build simple checks in Power BI to review and analyze eliminations.

2. Upload Elimination Entries: Using Acterys, your team can enter or upload eliminating entries to generate accurate (de-duplicated) consolidated reporting.

3. Convert Currencies for Foreign Entities: Power BI can also be used to create a toggle between group and local currencies whenever your team needs to account for international entities. This will give your leadership the ability to analyze data at a consolidated level in group currency, but drill into individual entities at either group currency or local currency.

4. Create Filters to Consolidate or Drill into Entities: Your team will now have the ability to build comprehensive financial analytics across and within entities, allowing you to benchmark and compare performance, evaluate trends, and make decisions in real-time.

Consolidation: Getting the Big Picture

Being able to get the whole picture of your business, in real-time, across and within entities, and review in-depth analytics is a capability most organizations struggle with. Building this capability will put your team ahead of the majority of your peers—it can serve as the foundation for generating organization-wide analytics best practices that can give your team a competitive advantage.

In the Next Newsletter

We will learn about enterprise performance management in Power BI.